While [MMS] officials interact with energy company executives, they are subject to government ethics rules, such as restrictions on taking gifts from sources with whom they conduct official business.

The culture of the organization “appeared to be devoid of both the ethical standards and internal controls sufficient to protect the integrity of this vital revenue-producing program."

One employee, Jimmy W. Mayberry, drafted a “statement of work” for a consulting contract to perform essentially identical functions to his own job before he left in 2002. He then retired, started a company, and won the contract with the help of his former supervisor and another friend at the agency. Mayberry has plead guilty to felony conflict-of-interest charge in August and faces a potential sentence of up to five years in prison and a $250,000 fine.

Eight officials accepted gifts from energy companies whose value exceeded limits set by ethics rules — including golf, ski and paintball outings; meals and drinks; and tickets to a Toby Keith concert, a Houston Texans football game and a Colorado Rockies baseball game.

Several officials “frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and gas company representatives.”

Gregory W. Smith, the former program director of the royalty-in-kind program, [is accused] of improperly accepting gifts from the oil and gas industry, of engaging in sex with two subordinates, and of using cocaine that he purchased from his secretary or her boyfriend several times a year between 2002 and 2005. He sometimes asked for the drugs and received them in his office during work hours, the report alleges. The report said that from April 2002 to June 2003, Mr. Smith improperly used his position with the royalty program to help a technical services firm seek deals with the same oil and gas companies. The services firm paid Mr. Smith more than $30,000 for asking the oil companies to hire it, the report said. The report also says that Mr. Smith lied to investigators about these and other incidents, and that he urged the two women subordinates to mislead the investigators as well.

19 officials — about one-third of the program’s staff — accepted gratuities from oil companies...Eight of the 19 accepted gifts that exceeded maximum limits for gifts for government employees.... On one occasion in 2002, the report said, two of the officials who marketed taxpayers’ oil got so drunk at a daytime golfing event sponsored by Shell that they could not drive to their hotels and were put up in Shell-provided lodging. The same two women also “engaged in brief sexual relationships with industry contacts,” the reports’ cover memo said, adding that “sexual relationships with prohibited sources cannot, by definition, be arms-length.”